Just a random musing. As EV’s become more popular, means less gas being used, means potentially lower prices since supply of gas should increase? Or do they just cut production and keep prices the same.

Wondering what will happen in the long term.

  • djwildstar@alien.topBEnglish
    1·
    1 year ago

    Over the very long term yes, over shorter time spans, no. Here’s my thinking:

    • In the near term (next few years) EVs will still be in a minority worldwide, and EV use will be insufficient to affect oil prices more than other factors.
    • In the medium term (next few decades), EV adoption will significantly reduce demand. Prices will stay relatively stable because oil producers are incentivized to maximize their profits. This means they will reduce production to keep prices high, but not so high that they drive faster adoption of EVs.
    • Over the long term, transportation will be decarbonized, practically eliminating the demand for gasoline. Other (non-gasoline) oil products and byproducts will drive oil extraction, and possibly a surplus of gasoline production. However, distribution costs may keep prices higher than they would be otherwise — in a universe where gas stations are many miles apart, the individual retailer can set practically any price they want.